REGULATIONS:

Air rule heads to scrapheap as Obama touts effort to eliminate 'unnecessary burdens'

In what the White House calls a milestone in its effort to cut red tape, the Obama administration today said it was overhauling or eliminating five regulations -- including a Clinton-era air-pollution rule -- in an effort to save $6 billion in unnecessary costs over the next five years.

President Obama also issued a new executive order aimed at ensuring that federal agencies make regulatory streamlining a part of their missions in years to come.

"Smart rules can save lives and keep us safe, but there are some regulations that don't make sense and cost too much," Obama said in a statement accompanying today's executive order. "We will remain vigilant when it comes to eliminating regulations that are not necessary or that impose unnecessary burdens on America's families and businesses."

But the much-touted review has been eyed skeptically by environmentalists and other supporters of federal protections, who worry that the administration is trying to curry political favor by throwing open the rulebooks to revision by industry groups.

Rena Steinzor, president of the left-leaning Center for Progressive Reform, decried the effort in a blog post today as the "latest salvo in the Administration's efforts to placate the business community."

Republicans and industry groups remain cool to the effort, accusing Obama of heading an administration that has produced an excessive number of costly regulations that hurt businesses.

"President Obama's executive order might appear to be a small step in the right direction but it does little to address the job-killing regulatory costs his Administration has imposed in the last three years," House Oversight and Government Reform Chairman Darrell Issa (R-Calif.) said in a statement. "Rules imposed by his Administration including the 106 new major federal regulations added during his term have cost the economy more than $46 billion per year. These regulations impede job creation and stifle economic growth."

Among the five regulatory changes announced today is a finalized plan by U.S. EPA to phase out 18-year-old rules requiring gasoline stations to reduce air pollution by using special nozzles on gas pumps.

In 1994, EPA began requiring service stations in some areas to use vapor-recovery nozzles to trap harmful chemicals that can escape from gas tanks. But newer vehicles are built with their own systems for capturing those emissions. About 70 percent of cars, trucks and light-duty vehicles have such systems, and last year EPA began the process of eliminating the nozzle rule.

It's estimated that dropping the nozzles will save gas stations about $3,000 per year, and the White House said about $300 million will be saved over five years by eliminating the rule. EPA said in a release the phaseout process will begin later this year.

Among the rule changes is a Department of Transportation effort to give state and local governments more flexibility in adopting national requirements for street signs and traffic control. DOT is also finalizing a rule that would give companies more flexibility instituting new train control systems on tracks that don't carry passengers or toxic materials.

The bulk of the savings from the rule changes announced today is expected to come from two efforts to streamline regulatory and reporting requirements currently imposed on hospitals and other health care providers. Those changes are estimated to save about $1 billion a year over the next five years.

Executive order

Along with the rule changes and executive order released today, the White House issued a report on the status of the governmentwide regulatory review process that began with a January 2011 executive order that required executive branch agencies to review all significant regulations and justify their costs with benefits.

About two dozen agencies have already completed their rulebook reviews and more than 500 potential reforms have been identified, the report notes. In January, White House regulatory czar Cass Sunstein estimated that initiatives already under way would result in more than $10 billion in savings.

And while regulatory streamlining efforts have been undertaken by several other administrations, Obama charted new territory last summer when he asked independent agencies to join the effort. Today's report notes that 20 independent agencies have joined the effort. (Greenwire, July 11, 2011)

Among the efforts being undertaken is a proposed rule being developed by the Federal Energy Regulatory Commission to eliminate redundant reporting requirements for natural gas companies. The change is estimated to save $440,000 annually.

And the White House hopes to keep racking up the savings by ensuring the agency rule review process continues in the years to come. Today's executive order requires agencies to report on their review efforts each January and July.

Reactions

The handful of changes to rules announced today was welcomed by some industry officials, but, like Issa, they said there is much more to be done.

"The administration is taking steps in the right direction by eliminating regulations that could unnecessarily harm the economy," said Howard Feldman, the American Petroleum Institute's director of regulatory and scientific affairs. "For the sake of the millions of Americans still looking for work, we urge the White House to eliminate some of the largest threats to the economy like EPA's upcoming tsunami of unnecessary and burdensome regulations."

During a break of an Oversight and Government Reform Committee hearing today, Rep. James Lankford (R-Okla.) questioned when agencies would get around to assessing the red tape in the rules that have been passed on Obama's watch.

Lankford, who chairs the panel's intergovernmental relations subcommittee, said the real problem that needs to be looked into is overlap and duplication of effort. He added that the best way to ensure that the federal government continues to scale back red tape is through congressional action, not continued executive orders.

"I don't mind regulatory look-backs, but you can't make it permanent with an executive order," Lankford said. "That's not possible unless he intends to be president forever."

But Celia Wexler, who works on regulatory and scientific integrity issues for the Union of Concerned Scientists, said that the multiple executive orders about streamlining federal regulations send the wrong signal. Wexler said the ongoing effort by the White House plays into the false narrative that regulation is inherently bad and costly.

"We had regulations when the economy was growing just fine, and a lot of people would argue that it was a lack of regulation that hurt the economy in 2008," Wexler said.

She added that the Obama administration's actions seem to encourage agencies to focus on tearing up their rulebooks "rather than their missions, which is protecting us, protecting the environment, protecting health and safety."

Reporter Emily Yehle contributed.

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